Concurrent Federal and State Jurisdiction

CONCURRENT FEDERAL AND STATE JURISDICTION

The General Issue: Preemption

In Gibbons v. Ogden,1087 the Court, speaking by Chief Justice Marshall, held that New York legislation that excluded from the navigable waters of that State steam vessels enrolled and licensed under an act of Congress to engage in the coasting trade was in conflict with the federal law and hence void.1088 The result, said the Chief Justice, was required by the supremacy clause, which proclaimed not only that the Constitution itself but statutes enacted pursuant to it and treaties superseded state laws that interfere with, or are contrary to the laws of Congress ... In every such case, the act of Congress, or the treaty, is supreme; and the law of the State, though enacted in the exercise of powers not controverted, must yield to it.1089

1087 22 U.S. (9 Wheat.) 1 (1824).

1088 A modern application of Gibbons v. Ogden is Douglas v. Seacoast Products, Inc., 431 U.S. 265 (1977), in which the Court, in reliance on the present version of the licensing statute utilized by Chief Justice Marshall, struck down state laws curtailing the operations of federally licensed vessels. In the course of the Douglas opinion, the Court observed that [a]lthough it is true that the Court’s view in Gibbons of the intent of the Second Congress in passing the Enrollment and Licensing Act is considered incorrect by commentators, its provisions have been repeatedly re-enacted in substantially the same form. We can safely assume that Congress was aware of the holding, as well as the criticism, of a case so renowned as Gibbons. We have no doubt that Congress has ratified the statutory interpretation of Gibbons and its progeny. Id. at 278–79.

1089 Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 211 (1824). See also McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 436 (1819). Although preemption is basically constitutional in nature, deriving its forcefulness from the supremacy clause, it is much more like statutory decisionmaking, inasmuch as it depends upon an interpretation of an act of Congress in determining whether a state law is ousted. E.g., Douglas v. Seacoast Products, Inc., 431 U.S. 265, 271–72 (1977). See also Swift & Co. v. Wickham, 382 U.S. 111 (1965). Any such pre-emption or conflict claim is of course grounded in the Supremacy Clause of the Constitution: if a state measure conflicts with a federal requirement, the state provision must give way. The basic question involved in these cases, however, is never one of interpretation of the Federal Constitution but inevitably one of comparing two statutes. Id. at 120.

Since the turn of the century, federal legislation, primarily but not exclusively under the commerce clause, has penetrated deeper and deeper into areas once occupied by the regulatory power of the States. One result is that state laws on subjects about which Congress has legislated have been more and more frequently attacked as being incompatible with the acts of Congress and hence invalid under the supremacy clause.1090

The constitutional principles of preemption, in whatever particular field of law they operate, are designed with a common end in view: to avoid conflicting regulation of conduct by various official bodies which might have some authority over the subject matter.1091 As Justice Black once explained in a much quoted exposition of the matter: There is not—and from the very nature of the problem there cannot be—any rigid formula or rule which can be used as a universal pattern to determine the meaning and purpose of every act of Congress. This Court, in considering the validity of state laws in the light of treaties or federal laws touching the same subject, has made use of the following expressions: conflicting; contrary to; occupying the field; repugnance; difference; irreconcilability; inconsistency; violation; curtailment; and interference. But none of these expressions provides an infallible constitutional test or an exclusive constitutional yardstick. In the final analysis, there can be no one crystal clear distinctly marked formula. Our primary function is to determine whether, under the circumstances of this particular case, Pennsylvania’s law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.1092

Before setting out in their various forms the standards and canons to which the Court formally adheres, one must still recognize the highly subjective nature of their application. As an astute observer long ago observed, the use or non-use of particular tests, as well as their content, is influenced more by judicial reaction to the desirability of the state legislation brought into question than by metaphorical sign-language of ‘occupation of the field.’ And it would seem that this is largely unavoidable. The Court, in order to determine an unexpressed congressional intent, has undertaken the task of making the independent judgment of social values that Congress has failed to make. In making this determination, the Court’s evaluation of the desirability of overlapping regulatory schemes or overlapping criminal sanctions cannot but be a substantial factor.1093

1090 Cases considered under this heading are overwhelmingly about federal legislation based on the commerce clause, but the principles enunciated are identical whatever source of power Congress utilizes. Therefore, cases arising under legislation based on other powers are cited and treated interchangeably.

1092 Hines v. Davidowitz, 312 U.S. 52, 67 (1941). This case arose under the immigration power of cl. 4.

1093 Cramton, Pennsylvania v. Nelson: A Case Study in Federal Preemption, 26 U. CHI. L. REV. 85, 87–88 (1956). The [Court] appears to use essentially the same reasoning process in a case nominally hinging on preemption as it has in past cases in which the question was whether the state law regulated or burdened interstate commerce. [The] Court has adopted the same weighing of interests approach in preemption cases that it uses to determine whether a state law unjustifiably burdens interstate commerce. In a number of situations the Court has invalidated statutes on the preemption ground when it appeared that the state laws sought to favor local economic interests at the expense of the interstate market. On the other hand, when the Court has been satisfied that valid local interests, such as those in safety or in the reputable operation of local business, outweigh the restrictive effect on interstate commerce, the Court has rejected the preemption argument and allowed state regulation to stand. Note, Preemption as a Preferential Ground: A New Canon of Construction, 12 STAN. L. REV. 208, 217 (1959) (quoted approvingly as a thoughtful student comment in G. GUNTHER, CONSTITUTIONAL LAW 297 (12th ed. 1991)).

Preemption Standards.—Until roughly the New Deal, as recited above, the Supreme Court applied a doctrine of dual federalism, under which the Federal Government and the States were separate sovereigns, each preeminent in its own fields but lacking authority in the other’s. This conception affected preemption cases, with the Court taking the view, largely, that any congressional regulation of a subject effectively preempted the field and ousted the States.1094 Thus, when Congress entered the field of railroad regulation, the result was invalidation of many previously enacted state measures. Even here, however, safety measures tended to survive, and health and safety legislation in other areas was protected from the effects of federal regulatory actions.

In the 1940s, the Court began to develop modern standards for determining when preemption occurred, which are still recited and relied on.1095 All modern cases recite some variation of the basic standards. [T]he question whether a certain state action is preempted by federal law is one of congressional intent. The purpose of Congress is the ultimate touchstone. To discern Congress’ intent we examine the explicit statutory language and the structure and purpose of the statute.1096 Congress’ intent to supplant state authority in a particular field may be express in the terms of the statute.1097 Since preemption cases, when the statute contains no express provision, theoretically turn on statutory construction, generalizations about them can carry one only so far. Each case must construe a different federal statute with a distinct legislative history. If the statute and the legislative history are silent or unclear, the Supreme Court has developed over time general criteria which it purports to utilize in determining the preemptive effect of federal legislation.

Absent explicit pre-emptive language, we have recognized at least two types of implied pre-emption: field pre-emption, where the scheme of federal regulation is so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it, . . . and conflict pre-emption, where compliance with both federal and state regulations is a physical impossibility, . . . or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.1098 Preemption of state law by federal statute or regulation is not favored ‘in the absence of persuasive reasons—either that the nature of the regulated subject matters permits no other conclusion, or that the Congress has unmistakably so ordained.1099 However, [t]he relative importance to the State of its own law is not material when there is a conflict with a valid federal law, for the Framers of our Constitution provided that the federal law must prevail.1100

In the final conclusion, the generalities that may be drawn from the cases do not decide them. Rather, the fate of state legislation in these cases has not been determined by these generalities but by the weight of the circumstances and the practical and experienced judgment in applying these generalities to the particular instances.1101

The Standards Applied.—As might be expected from the caveat just quoted, any overview of the Court’s preemption decisions can only make the field seem muddled, and to some extent it is. But some guidelines may be extracted.

Express Preemption. Of course, it is possible for Congress to write preemptive language that clearly and cleanly prescribes or does not prescribe displacement of state laws in an area.1102 Provisions governing preemption can be relatively interpretation free.1103 For example, a prohibition of state taxes on carriage of air passengers or on the gross receipts derived therefrom was held to preempt a state tax on airlines, described by the State as a personal property tax, but based on a percentage of the airline’s gross income; the manner in which the state legislature has described and categorized [the tax] cannot mask the fact that the purpose and effect of the provision are to impose a levy upon the gross receipts of airlines.1104 But, more often than not, express preemptive language may be ambiguous or at least not free from conflicting interpretation. Thus, the Court was divided with respect to whether a provision of the Airline Deregulation Act proscribing the States from having and enforcing laws relating to rates, routes, or services of any air carrier applied to displace state consumer-protection laws regulating airline fare advertising.1105 A basic issue is whether preemption or saving language applicable to a state applies as well to local governments. In a case involving statutory language preserving state authority, the Court created a presumption favoring applicability to local governments: [a]bsent a clear statement to the contrary, Congress’ reference to the ‘regulatory authority of a State’ should be read to preserve, not preempt, the traditional prerogative of the States to delegate their authority to their constituent parts.1106

1102 Not only congressional enactments can preempt. Agency regulations, when Congress has expressly or implied empowered these bodies to preempt, are the supreme law of the land under the supremacy clause and can displace state law. E.g., Smiley v. Citibank, 517 U.S. 735 (1996); City of New York v. FCC, 486 U.S. 57, 63–64 (1988); Louisiana Public Service Comm’n v. FCC, 476 U.S. 355 (1986); Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691 (1984); Fidelity Federal Savings & Loan Ass’n v. de la Cuesta, 458 U.S. 141 (1982). Federal common law, i.e., law promulgated by the courts respecting uniquely federal interests and absent explicit statutory directive by Congress, can also displace state law. See Boyle v. United Technologies Corp., 487 U.S. 500 (1988) (Supreme Court promulgated common-law rule creating government-contractor defense in tort liability suits, despite Congress having considered and failed to enact bills doing precisely this); Westfall v. Erwin, 484 U.S. 292 (1988) (civil liability of federal officials for actions taken in the course of their duty). Finally, ordinances of local governments are subject to preemption under the same standards as state law. Hillsborough County v. Automated Medical Laboratories, 471 U.S. 707 (1985).

1103 Thus, § 408 of the Federal Meat Inspection Act, as amended by the Wholesome Meat Act, 21 U.S. C. § 678, provides that [m]arking, labeling, packaging, or ingredient requirements in addition to, or different than, those made under this chapter may not be imposed by any state ... . See Jones v. Rath Packing Co., 430 U.S. 519, 528–532 (1977). Similarly, much state action is saved by the Securities Exchange Act of 1934, 15 U.S.C. § 78bb(a), which states that [n]othing in this chapter shall affect the jurisdiction of the securities commissioner (or any agency or officer performing like functions) of any State over any security or any person insofar as it does not conflict with the provisions of this chapter or the rules and regulations thereunder. For examples of other express preemptive provisions, see Norfolk & Western Ry. v. American Train Dispatchers’ Ass’n, 499 U.S. 117 (1991); Exxon Corp. v. Hunt, 475 U.S. 355 (1986). And see Department of Treasury v. Fabe, 508 U.S. 491 (1993).

Perhaps the broadest preemption section ever enacted, § 514 of the Employment Retirement Income Security Act of 1974 (ERISA), is so constructed that the Court has been moved to comment that the provisions are not a model of legislative drafting.1107 The section declares that the statute shall supersede any and all State laws insofar as they now or hereafter relate to any employee benefit plan, but saves to the States the power to enforce law[s] . . . which regulates insurance, banking, or securities, except that an employee benefit plan governed by ERISA shall not be deemed an insurance company, an insurer, or engaged in the business of insurance for purposes of state laws purporting to regulate insurance companies or insurance contracts.1108 Interpretation of the provisions has resulted in contentious and divided Court opinions.1109

1109 Ingersoll-Rand Co. v. McClendon, 498 U.S. 133 (1990) (ERISA preempts state common-law claim of wrongful discharge to prevent employee attaining benefits under plan covered by ERISA); FMC Corp. v. Holliday, 498 U.S. 52 (1990) (provision of state motor-vehicle financial-responsibility law barring subrogation and reimbursement from claimant’s tort recovery for benefits received from a self-insured health-care plan preempted by ERISA); Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (1987) (state law requiring employers to provide a one-time severance payment to employees in the event of a plant closing held not preempted by 5–4 vote); Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724 (1985) (state law mandating that certain minimum mental-health-care benefits be provided to those insured under general health-insurance policy or employee health-care plan is a law which regulates insurance and is not preempted); Shaw v. Delta Air Lines, 463 U.S. 85 (1983) (state law forbidding discrimination in employee benefit plans on the basis of pregnancy not preempted, because of another saving provision in ERISA, and provision requiring employers to pay sick-leave benefits to employees unable to work because of pregnancy not preempted under construction of coverage sections, but both laws relate to employee benefit plans); Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504 (1981) (state law prohibiting plans from reducing benefits by amount of workers’ compensation awards relates to employee benefit plan and is preempted); District of Columbia v. Greater Washington Bd. of Trade, 506 U.S. 125 (1992) (law requiring employers to provide health insurance coverage, equivalent to existing coverage, for workers receiving workers’ compensation benefits); John Hancock Mutual Life Ins. Co. v. Harris Trust and Savings Bank, 510 U.S. 86 (1993) (ERISA’s fiduciary standards, not conflicting state insurance laws, apply to insurance company’s handling of general account assets derived from participating group annuity contract); New York State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995) (no preemption of statute that required hospitals to collect surcharges from patients covered by a commercial insurer but not from patients covered by Blue Cross/Blue Shield plan); De Buono v. NYSA-ILA Medical and Clinical Services Fund, 520 U.S. 806 (1997); California Div. of Labor Standards Enforcement v. Dillingham Construction, Inc., 519 U.S. 316 (1997); Boggs v. Boggs, 520 U.S. 833 (1997) (decided not on the basis of the express preemption language but instead by implied preemption analysis).
Aetna Health, Inc. v. Davila, 542 U.S. 200 (2004) (suit brought against HMO under state health care liability act for failure to exercise ordinary care when denying benefits is preempted).

Illustrative of the judicial difficulty with ambiguous preemption language are the fractured opinions in the Cipollone case, in which the Court had to decide whether sections of the Federal Cigarette Labeling and Advertising Act, enacted in 1965 and 1969, preempted state common-law actions against a cigarette company for the alleged harm visited on a smoker.1110 The 1965 provision barred the requirement of any statement relating to smoking health, other than what the federal law imposed, and the 1969 provision barred the imposition of any requirement or prohibition based on smoking and health by any State law. It was, thus, a fair question whether common-law claims, based on design defect, failure to warn, breach of express warranty, fraudulent misrepresentation, and conspiracy to defraud, were preempted or whether only positive state enactments came within the scope of the clauses. Two groups of Justices concluded that the 1965 section reached only positive state law and did not preempt common-law actions;1111 different alignments of Justices concluded that the 1969 provisions did reach common-law claims, as well as positive enactments, and did preempt some of the claims insofar as they in fact constituted a requirement or prohibition based on smoking health.1112

1110 Cipollone v. Liggett Group, 505 U.S. 504 (1992). The decision as a canon of construction promulgated two controversial rules. First, the courts should interpret narrowly provisions that purport to preempt state police-power regulations, and, second, that when a law has express preemption language courts should look only to that language and presume that when the preemptive reach of a law is defined Congress did not intend to go beyond that reach, so that field and conflict preemption will not be found. Id. at 517; and id. at 532-33 (Justice Blackmun concurring and dissenting). Both parts of this canon are departures from established law. Narrow construction when state police powers are involved has hitherto related to implied preemption, not express preemption, and courts generally have applied ordinary-meaning construction to such statutory language; further, courts have not precluded the finding of conflict preemption, though perhaps field preemption, because of the existence of some express preemptive language. See id. at 546-48 (Justice Scalia concurring and dissenting).

1111 505 U.S. at 518-19 (opinion of the court), 533-34 (Justice Blackmun concurring).

Little clarification of the confusing Cipollone decision and opinions resulted in the cases following, although it does seem evident that the attempted distinction limiting courts to the particular language of preemption when Congress has spoken has not prevailed. At issue in Medtronic, Inc. v. Lohr, was1113 the Medical Device Amendments (MDA) of 1976, which prohibited States from adopting or continuing in effect with respect to a [medical] device any requirement that is different from, or in addition to the applicable federal requirement and that relates to the safety or effectiveness of the device.1114 The issue, then, was whether a common-law tort obligation imposed a requirement that was different from or in addition to any federal requirement. The device, a pacemaker lead, had come on the market not pursuant to the rigorous FDA test but rather as determined by the FDA to be substantially equivalent to a device previously on the market, a situation of some import to at least some of the Justices.

Unanimously, the Court determined that a defective design claim was not preempted and that the MDA did not prevent States from providing a damages remedy for violation of common-law duties that paralleled federal requirements. But the Justices split 4– 1-4 with respect to preemption of various claims relating to manufacturing and labeling. FDA regulations, which a majority deferred to, limited preemption to situations in which a particular state requirement threatens to interfere with a specific federal interest. Moreover, the common-law standards were not specifically developed to govern medical devices and their generality removed them from the category of requirements with respect to specific devices. However, five Justices did agree that common-law requirements could be, just as statutory provisions, requirements that were preempted, though they did not agree on the application of that view.1115

1115 The dissent, by Justice O’Connor and three others, would have held preempted the latter claims, 518 U.S. at 509, whereas Justice Breyer thought that common-law claims would sometimes be preempted, but not here. Id. at 503 (concurring).

Following Cipollone, the Court observed that while it need not go beyond the statutory preemption language, it did need to identify the domain expressly pre-empted by the language, so that our interpretation of that language does not occur in a contextual vacuum. That is, it must be informed by two presumptions about the nature of preemption: the presumption that Congress does not cavalierly preempt common-law causes of action and the principle that it is Congress’ purpose that is the ultimate touchstone.1116

The Court continued to struggle with application of express preemption language to state common-law tort actions in Geier v. American Honda Motor Co.1117 The National Traffic and Motor Vehicle Safety Act contained both a preemption clause, prohibiting states from applying any safety standard different from an applicable federal standard, and a saving clause, providing that compliance with a federal safety standard does not exempt any person from any liability under common law. The Court determined that the express preemption clause was inapplicable. However, despite the saving clause, the Court ruled that a common law tort action seeking damages for failure to equip a car with an airbag was preempted because its application would frustrate the purpose of a Federal Motor Vehicle Safety Standard that had allowed manufacturers to choose from among a variety of passive restraint systems for the applicable model year.1118 The Court’s holding makes clear, contrary to the suggestion in Cipollone, that existence of express preemption language does not foreclose operation of conflict (in this case frustration of purpose) preemption.*

1118 The Court focused on the word exempt to give the saving clause a narrow application – as simply bar[ring] a special kind of defense, . . . that compliance with a federal safety standard automatically exempts a defendant from state law, whether the Federal Government meant that standard to be an absolute requirement or only a minimum one. 529 U.S. at 869.
But cf. Sprietsma v. Mercury Marine, 537 U.S. 51 (2002) (interpreting preemption language and saving clause in Federal Boat Safety Act as not precluding a state common law tort action).

* For a more recent decision applying express preemption language to a variety of state common law claims, see Bates v. Dow Agrosciences LLC, 544 U.S. 431 (2005) (interpreting FIFRA, the federal law governing pesticides).

Field Preemption. Where the scheme of federal regulation is so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it,1119 States are ousted from the field. Still a paradigmatic example of field preemption is Hines v. Davidowitz,1120 in which the Court held that a new federal law requiring the registration of all aliens in the country precluded enforcement of a pre-existing state law mandating registration of aliens within the State. Adverting to the supremacy of national power in foreign relations and the sensitivity of the relationship between the regulation of aliens and the conduct of foreign affairs, the Court had little difficulty declaring the entire field to have been occupied by federal law.1121 Similarly, in Pennsylvania v. Nelson,1122 the Court invalidated as preempted a state law punishing sedition against the National Government. The Court enunciated a three-part test: 1) the pervasiveness of federal regulation; 2) federal occupation of the field as necessitated by the need for national uniformity; and 3) the danger of conflict between state and federal administration.1123

The Rice case itself held that a federal system of regulating the operations of warehouses and the rates they charged completely occupied the field and ousted state regulation.1124 However, it is often a close decision whether a federal law has regulated part of a field, however defined, or the whole area, so that state law cannot even supplement the federal.1125 Illustrative of this point is the Court’s holding that the Atomic Energy Act’s preemption of the safety aspects of nuclear power did not invalidate a state law conditioning construction of nuclear power plants on a finding by a state agency that adequate storage and disposal facilities were available to treat nuclear wastes, since economic regulation of power generation has traditionally been left to the States - an arrangement maintained by the Act - and since the state law could be justified as an economic rather than a safety regulation.1126

1119 Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947). The case also is the source of the oft-quoted maxim that when Congress legislates in a field traditionally occupied by the States, courts should start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress. Id.

1120 312 U.S. 52 (1941).

1121 The Court also said that courts must look to see whether under the circumstances of a particular case, the state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress. 312 U.S. at 67. That standard is obviously drawn from conflict preemption, for the two standards are frequently intermixed. Nonetheless, not all state regulation is precluded. De Canas v. Bica, 424 U.S. 351 (1976) (upholding a state law penalizing the employment of an illegal alien, the case arising before enactment of the federal law doing the same thing).

1122 350 U.S. 497 (1956).

1123 350 U.S. at 502–05. Obviously, there is a noticeable blending into conflict preemption.

1124 Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947).

1125Compare Campbell v. Hussey, 368 U.S. 297 (1961) (state law requiring tobacco of a certain type to be marked by white tags, ousted by federal regulation that occupied the field and left no room for supplementation), with Florida Lime & Avocado Growers, Inc., 373 U.S. 132 (1963) (state law setting minimum oil content for avocados certified as mature by federal regulation is complementary to federal law, since federal standard was a minimum one, the field having not been occupied). One should be wary of assuming that a state law that has dual purposes and impacts will not, just for the duality, be held to be preempted. See Gade v. National Solid Wastes Mgmt. Ass’n, 505 U.S. 88 (1992); Perez v. Campbell, 402 U.S. 637 (1971) (under bankruptcy clause).

1126 Pacific Gas & Elec. Co. v. Energy Resources Comm’n, 461 U.S. 190 (1983). Neither does the same reservation of exclusive authority to regulate nuclear safety preempt imposition of punitive damages under state tort law, even if based upon the jury’s conclusion that a nuclear licensee failed to follow adequate safety precautions. Silkwood v. Kerr-McGee Corp., 464 U.S. 238 (1984). See also English v. General Electric Co., 496 U.S. 72 (1990) (employee’s state-law claim for intentional infliction of emotional distress for her nuclear-plant employer’s actions retaliating for her whistleblowing is not preempted as relating to nuclear safety).

A city’s effort to enforce stiff penalties for ship pollution that resulted from boilers approved by the Federal Government was held not preempted, the field of boiler safety, but not boiler pollution, having been occupied by federal regulation.1127 A state liability scheme imposing cleanup costs and strict, no-fault liability on shore facilities and ships for any oil-spill damage was held to complement a federal law concerned solely with recovery of actual cleanup costs incurred by the Federal Government and which textually presupposed federal-state cooperation.1128 On the other hand, a comprehensive regulation of the design, size, and movement of oil tankers in Puget Sound was found, save in one respect, to be either expressly or implicitly preempted by federal law and regulations. Critical to the determination was the Court’s conclusion that Congress, without actually saying so, had intended to mandate exclusive standards and a single federal decisionmaker for safety purposes in vessel regulation.1129 Also, a closely divided Court voided a city ordinance placing an 11 p.m. to 7 a.m. curfew on jet flights from the city airport where, despite the absence of preemptive language in federal law, federal regulation of aircraft noise was of such a pervasive nature as to leave no room for state or local regulation.1130

Congress may preempt state regulation without itself prescribing a federal standard; it may deregulate a field and thus occupy it by opting for market regulation and precluding state or local regulation.1131

Conflict Preemption. Several possible situations will lead to a holding that a state law is preempted as in conflict with federal law. First, it may be that the two laws, federal and state, will actually conflict. Thus, in Rose v. Arkansas State Police,1132 federal law provided for death benefits for state law enforcement officers in addition to any other compensation, while the state law required a reduction in state benefits by the amount received from other sources. The Court, in a brief, per curiam opinion, had no difficulty finding the state provision preempted.1133

Second, conflict preemption may occur when it is practically impossible to comply with the terms of both laws. Thus, where a federal agency had authorized federal savings and loan associations to include due-on-sale clauses in their loan instruments and where the State had largely prevented inclusion of such clauses, while it was literally possible for lenders to comply with both rules, the federal rule being permissive, the state regulation prevented the exercise of the flexibility the federal agency had conferred and was preempted.1134 On the other hand, it was possible for an employer to comply both with a state law mandating leave and reinstatement to pregnant employees and with a federal law prohibiting employment discrimination on the basis of pregnancy.1135 Similarly, when faced with both federal and state standards on the ripeness of avocados, the Court discerned that the federal standard was a minimum one rather than a uniform one and decided that growers could comply with both.1136

1133See also Lawrence County v. Lead-Deadwood School Dist., 469 U.S. 256 (1985) (state law requiring local governments to distribute federal payments in lieu of taxes in same manner as general state-tax revenues conflicts with federal law authorizing local governments to use the payments for any governmental purpose); Southland Corp. v. Keating, 465 U.S. 1 (1984) (state franchise law requiring judicial resolution of claims preempted by federal arbitration law precluding adjudication in state or federal courts of claims parties had contracted to submit to arbitration); Perry v. Thomas, 482 U.S. 483 (1987) (federal arbitration law preempts state law providing that court actions for collection of wages may be maintained without regard to agreements to arbitrate); Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265 (1995) (federal arbitration law preempts state law invalidating predispute arbitration agreements that were not entered into in contemplation of substantial interstate activity); Doctor’s Associates, Inc. v. Casarotto, 517 U.S. 681 (1996) (federal arbitration law preempts state statute that conditioned enforceability of arbitration clause on compliance with special notice requirement). See also Free v. Brand, 369 U.S. 663 (1962).

1135 California Federal Savings & Loan Ass’n v. Guerra, 479 U.S. 272 (1987). Compare Cloverleaf Butter v. Patterson, 315 U.S. 148 (1942) (federal law preempts more exacting state standards, even though both could be complied with and state standards were harmonious with purposes of federal law).

Third, a fruitful source of preemption is found when it is determined that the state law stands as an obstacle to the accomplishment of the full purposes and objectives of Congress.1137 Thus, the Court voided a state requirement that the average net weight of a package of flour in a lot could not be less than the net weight stated on the package. While applicable federal law permitted variations from stated weight caused by distribution losses, such as through partial dehydration, the State allowed no such deviation. Although it was possible for a producer to satisfy the federal standard while satisfying the tougher state standard, the Court discerned that to do so defeated one purpose of the federal require-ment—the facilitating of value comparisons by shoppers. Because different producers in different situations in order to comply with the state standard may have to overpack flour to make up for dehydration loss, consumers would not be comparing packages containing identical amounts of flour solids.1138 In Felder v. Casey,1139 a state notice-of-claim statute was found to frustrate the remedial objectives of civil rights laws as applied to actions brought in state court under 42 U. S. C. §1983. A state law recognizing the validity of an unrecorded oral sale of an aircraft was held preempted by the Federal Aviation Act’s provision that unrecorded instruments of transfer are invalid, since the congressional purpose evidenced in the legislative history was to make information about an aircraft’s title readily available by requiring that all transfers be documented and recorded.1140

In Boggs v. Boggs,1141 the Court, 5–to–4, applied the stands as an obstacle test for conflict even though the statute (ERISA) contains an express preemption section. The dispute arose in a community-property State, in which heirs of a deceased wife claimed property that involved pension-benefit assets that was left to them by testamentary disposition, as against a surviving second wife. Two ERISA provisions operated to prevent the descent of the property to the heirs, but under community-property rules the property could have been left to the heirs by their deceased mother. The Court did not pause to analyze whether the ERISA preemption provision operated to preclude the descent of the property, either because state law relate[d] to a covered pension plan or because state law had an impermissible connection with a plan, but it instead decided that the operation of the state law insofar as it conflicted with the purposes Congress had intended to achieve by ERISA and insofar as it ran into the two noted provisions of ERISA stood as an obstacle to the effectuation of the ERISA law. We can begin, and in this case end, the analysis by simply asking if state law conflicts with the provisions of ERISA or operates to frustrate its objects. We hold that there is a conflict, which suffices to resolve the case. We need not inquire whether the statutory phrase ‘relate to’ provides further and additional support for the pre-emption claim. Nor need we consider the applicability of field preemption.1142

1136 Florida Lime & Avocado Growers v. Paul, 373 U.S. 132 (1963).

1137 The standard is, of course, drawn from Hines v. Davidowitz, 312 U.S. 52, 67 (1941). See also Barnett Bank of Marion County v. Nelson, 517 U.S. 25 (1996) (federal law empowering national banks in small towns to sell insurance preempts state law prohibiting banks from dealing in insurance; despite explicit preemption provision, state law stands as an obstacle to accomplishment of federal purpose).

1138 Jones v. Rath Packing Co., 430 U.S. 519, 532–543 (1977).

1139 487 U.S. 131 (1988).

1140 Philco Aviation v. Shacket, 462 U.S. 406 (1983).

1141 520 U.S. 833 (1997).

1142 Id. at 841. The dissent, id. at 854 (Justice Breyer), agreed that conflict analysis was appropriate, but he did not find that the state law achieved any result that ERISA required.

Similarly, the Court found it unnecessary to consider field preemption due to its holding that a Massachusetts law barring state agencies from purchasing goods or services from companies doing business with Burma imposed obstacles to the accomplishment of Congress’s full objectives under the federal Burma sanctions law.1143 The state law was said to undermine the federal law in several respects that could have implicated field preemption – by limiting the President’s effective discretion to control sanctions, and by frustrating the President’s ability to engage in effective diplomacy in developing a comprehensive multilateral strategy – but the Court decline[d] to speak to field preemption as a separate issue.1144

Also, a state law making agricultural producers’ associations the exclusive bargaining agents and requiring payment of service fees by nonmember producers was held to counter a strong federal policy protecting the right of farmers to join or not join such associations.1145 And a state assertion of the right to set minimum stream-flow requirements different from those established by FERC in its licensing capacity was denied as being preempted under the Federal Power Act, despite language requiring deference to state laws relating to the control, appropriation, use, or distribution of water.1146

1143 Crosby v. National Foreign Trade Council, 530 U.S. 363 (2000).

1144 530 U.S. at 374 n.8.

1145 Michigan Canners & Freezers Ass’n v. Agricultural Marketing & Bargaining Bd., 467 U.S. 461 (1984). See also Nantahala Power & Light Co. v. Thornburg, 476 U.S. 953 (1986) (state allocation of costs for purposes of setting retail electricity rates, by disallowing costs permitted by FERC in setting wholesale rates, frustrated federal regulation by possibly preventing the utility from recovering in its sales the costs of paying the FERC-approved wholesale rate); Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691 (1984) (state ban on cable TV advertising frustrates federal policy in the copyright law by which cable operators pay a royalty fee for the right to retransmit distant broadcast signals upon agreement not to delete commercials); International Paper Co. v. Ouellette, 479 U.S. 481 (1987) (damage action based on common law of downstream State frustrates Clean Water Act’s policies favoring permitting State in interstate disputes and favoring predictability in permit process).

1146 California v. FERC, 495 U.S. 490 (1990). The savings clause was found inapplicable on the basis of an earlier interpretation of the language in First Iowa Hydro-Electric Cooperative v. FPC, 328 U.S. 152 (1946).

Contrarily, a comprehensive federal regulation of insecticides and other such chemicals was held not to preempt a town ordinance that required a permit for the spraying of pesticides, there being no conflict between requirements.1147 The application of state antitrust laws to authorize indirect purchasers to recover for all overcharges passed on to them by direct purchasers was held to implicate no preemption concerns, inasmuch as the federal antitrust laws had been interpreted as not permitting indirect purchasers to recover under federal law; state law may be inconsistent with federal law but in no way did it frustrate federal objectives and policies.1148 The effect of federal policy was not strong enough to warrant a holding of preemption when a State authorized condemnation of abandoned railroad property after conclusion of an ICC proceeding permitting abandonment, although the railroad’s opportunity costs in the property had been considered in the decision on abandonment.1149

Federal Versus State Labor Laws.—One group of cases, which has caused the Court much difficulty over the years, concerns the effect of federal labor laws on state power to govern labor-management relations. Although the Court some time ago reached a settled rule, changes in membership on the Court reopened the issue and modified the rules.

1149 Hayfield Northern Ry. v. Chicago & N.W. Transp. Co., 467 U.S. 622 (1984). See also CTS Corp. v. Dynamics Corp. of America, 481 U.S. 69 (1987) (federal law’s broad purpose of protecting shareholders as a group is furthered by state anti-take-over law); Rose v. Rose, 481 U.S. 619 (1987) (provision governing veterans’ disability benefits protects veterans’ families as well as veterans, hence state child-support order resulting in payment out of benefits is not preempted).

With the enactment of the National Labor Relations Act and subsequent amendments, Congress declared a national policy in labor-management relations and established the NLRB to carry out that policy.1150 It became the Supreme Court’s responsibility to determine what role state law on labor-management relations was to play. At first, the Court applied a test of determination whether the state regulation was in direct conflict with the national regulatory scheme. Thus, in one early case, the Court held that an order by a state board which commanded a union to desist from mass picketing of a factory and from assorted personal threats was not in conflict with the national law that had not been invoked and that did not touch on some of the union conduct in question.1151 A cease and desist order of a state board implementing a state provision making it an unfair labor practice for employees to conduct a slowdown or to otherwise interfere with production while on the job was found not to conflict with federal law,1152 while another order of the board was also sustained in its prohibition of the discharge of an employee under a maintenance-of-membership clause inserted in a contract under pressure from the War Labor Board and which violated state law.1153

On the other hand, a state statute requiring business agents of unions operating in the State to file annual reports and to pay an annual fee of one dollar was voided as in conflict with federal law.1154 And state statutes providing for mediation and outlawing public utility strikes were similarly voided as being in specific conflict with federal law.1155 A somewhat different approach was noted in several cases in which the Court held that the federal act had so occupied the field in certain areas as to preclude state regulation.1156 The latter approach was predominant through the 1950s as the Court voided state court action in enjoining1157 or awarding damages1158 for peaceful picketing, in awarding of relief by damages or otherwise for conduct which constituted an unfair labor practice under federal law,1159 or in enforcing state antitrust laws so as to affect collective bargaining agreements1160 or to bar a strike as a restraint of trade,1161 even with regard to disputes over which the NLRB declined to assert jurisdiction because of the degree of effect on interstate commerce.1162

1150 Throughout the ups-and-downs of federal labor-law preemption, it remains the rule that the Board remains preeminent and almost exclusive. See, e.g., Wisconsin Dep’t of Industry v. Gould, Inc., 475 U.S. 282 (1986) (States may not supplement Board enforcement by debarring from state contracts persons or firms that have violated the NLRA); Golden Gate Transit Corp. v. City of Los Angeles, 475 U.S. 608 (1986) (City may not condition taxicab franchise on settlement of strike by set date, since this intrudes into collective-bargaining process protected by NLRA). On the other hand, the NLRA’s protection of associational rights is not so strong as to outweigh the Social Security Act’s policy permitting States to determine whether to award unemployment benefits to persons voluntarily unemployed as the result of a labor dispute. New York Tel. Co. v. New York Labor Dep’t, 440 U.S. 519 (1979); Ohio Bureau of Employment Services v. Hodory, 431 U.S. 471 (1977); Baker v. General Motors Corp., 478 U.S. 621 (1986).

1154 Hill v. Florida ex rel. Watson, 325 U.S. 538 (1945). More recently, the Court has held that Hill’s premise that the NLRA grants an unqualified right to select union officials has been removed by amendments prohibiting some convicted criminals from holding union office. Partly because the federal disqualification standard was itself dependent upon application of state law, the Court ruled that more stringent state disqualification provisions, also aimed at individuals who had been involved in racketeering and other criminal conduct, were not inconsistent with federal law. Brown v. Hotel Employees, 468 U.S. 491 (1984).

1156 Weber v. Anheuser-Busch, Inc., 348 U.S. 468 (1955); Garner v. Teamsters Local 776, 346 U.S. 485 (1953); Bethlehem Steel Co. v. New York Employment Relations Bd., 330 U.S. 767 (1947). See also Livadas v. Bradshaw, 512 U.S. 107 (1994) (finding preempted because it stood as an obstacle to the achievement of the purposes of NLRA a practice of a state labor commissioner). Of course, where Congress clearly specifies, the Court has had no difficulty. Thus, in the NLRA, Congress provided, 29 U.S.C. § 164(b), that state laws on the subject could override the federal law on union security arrangements and the Court sustained those laws. Lincoln Federal Labor Union v. Northwestern Iron & Metal Co., 335 U.S. 525 (1949); AFL v. American Sash & Door Co., 335 U.S. 538 (1949). When Congress in the Railway Labor Act, 45 U.S.C.§ 152, Eleventh, provided that the federal law on union security was to override contrary state laws, the Court sustained that determination. Railway Employees’ Department v. Hanson, 351 U.S. 225 (1956). The Court has held that state courts may adjudicate questions relating to the permissibility of particular types of union security arrangements under state law even though the issue involves as well an interpretation of federal law., Retail Clerks Int’l Ass’n v. Schermerhorn, 375 U.S. 96 (1963).

1162 Guss v. Utah Labor Board, 353 U.S. 1 (1957). The no-man’s land thus created by the difference between the reach of Congress’ commerce power and the NLRB’s finite resources was closed by 73 Stat. 541, 29 U.S.C. § 164(c), which authorized the States to assume jurisdiction over disputes which the Board had indicated through promulgation of jurisdictional standards that it would not treat.

In San Diego Building Trades Council v. Garmon,1163 the Court enunciated the rule, based on its previous decade of adjudication. When an activity is arguably subject to § 7 or § 8 of the Act, the States . . . must defer to the exclusive competence of the National Labor Relations Board if the danger of state interference with national policy is to be averted.1164

For much of the period since Garmon, the dispute in the Court concerned the scope of the few exceptions permitted in the Garmon principle. First, when picketing is not wholly peaceful but is attended by intimidation, violence, and obstruction of the roads affording access to the struck establishment, state police powers have been held not disabled to deal with the conduct and narrowly-drawn injunctions directed against violence and mass picketing have been permitted1165 as well as damages to compensate for harm growing out of such activities.1166

A 1958 case permitted a successful state court suit for reinstatement and damages for lost pay because of a wrongful expulsion, leading to discharge from employment, based on a theory that the union constitution and by-laws constitute a contract between the union and the members the terms of which can be enforced by state courts without the danger of a conflict between state and federal law.1167 The Court subsequently narrowed the interpretation of this ruling by holding in two cases that members who alleged union interference with their existing or prospective employment relations could not sue for damages but must file unfair labor practice charges with the NLRB.1168Gonzales was said to be limited to purely internal union matters.1169 Finally, Gonzales, was abandoned in a five-to-four decision in which the Court held that a person who alleged that his union had misinterpreted its constitution and its collective bargaining agreement with the individual’s employer in expelling him from the union and causing him to be discharged from his employment because he was late paying his dues had to pursue his federal remedies.1170 While it was not likely that in Gonzales, a state court resolution of the scope of duty owed the member by the union would implicate principles of federal law, Justice Harlan wrote for the Court, state court resolution in this case involved an interpretation of the contract’s union security clause, a matter on which federal regulation is extensive.1171

1168 Journeymen Local 100 v. Borden, 373 U.S. 690 (1963); Iron Workers Local 207 v. Perko, 373 U.S. 701 (1963). Applying Perko, the Court held that a state court action by a supervisor alleging union interference with his contractual relationship with his employer is preempted by the NLRA. Local 926, Int’l Union of Operating Engineers v. Jones, 460 U.S. 669 (1983).

One other exception has been based, like the violence cases, on the assumption that it concerns areas traditionally left to local law into which Congress would not want to intrude. In Linn v. Plant Guard Workers,1172 the Court permitted a state court adjudication of a defamation action arising out of a labor dispute. And in Letter Carriers v. Austin,1173 the Court held that federal law preempts state defamation laws in the context of labor disputes to the extent that the State seeks to make actionable defamatory statements in labor disputes published without knowledge of their falsity or in reckless disregard of truth or falsity.

However, a state tort action for the intentional infliction of emotional distress occasioned through an alleged campaign of personal abuse and harassment of a member of the union by the union and its officials was held not preempted by federal labor law. Federal law was not directed to the outrageous conduct alleged, and NLRB resolution of the dispute would neither touch upon the claim of emotional distress and physical injury nor award the plaintiff any compensation. But state court jurisdiction, in order that there not be interference with the federal scheme, must be premised on tortious conduct either unrelated to employment discrimination or a function of the particularly abusive manner in which the discrimination is accomplished or threatened rather than a function of the actual or threatened discrimination itself.1174

A significant retrenchment of Garmon occurred in Sears, Roe-buck & Co. v. Carpenters,1175 in the context of state court assertion of jurisdiction over trespassory picketing. Objecting to the company’s use of nonunion work in one of its departments, the union picketed the store, using the company’s property, the lot area surrounding the store, instead of the public sidewalks, to walk on. After the union refused to move its pickets to the sidewalk, the company sought and obtained a state court order enjoining the picketing on company property. Depending upon the union motivation for the picketing, it was either arguably prohibited or arguably protected by federal law, the trespassory nature of the picketing being one factor the NLRB would have looked to in determining at least the protected nature of the conduct. The Court held, however, that under the circumstances, neither the arguably prohibited nor the arguably protected rationale of Garmon was sufficient to deprive the state court of jurisdiction.

1172 383 U.S. 53 (1966).

1173 418 U.S. 264 (1974).

1174 Farmer v. Carpenters, 430 U.S. 290 (1977). Following this case, the Court held that a state court action for misrepresentation and breach of contract, brought by replacement workers promised permanent employment when hired during a strike, was not preempted. The action for breach of contract by replacement workers having no remedies under the NLRA was found to be deeply rooted in local law and of only peripheral concern under the Act. Belknap, Inc. v. Hale, 463 U.S. 491 (1983). See also Int’l Longshoremen’s Ass’n v. Davis, 476 U.S. 380 (1986).

1175 436 U.S. 180 (1978).

First, as to conduct arguably prohibited by NLRA, the Court seemingly expanded the Garmon exception recognizing state court jurisdiction for conduct that touches interests deeply rooted in local feeling1176 in holding that where there exists a significant state interest in protecting the citizens from the challenged conduct and there exists little risk of interference with the regulatory jurisdiction of the NLRB, state law is not preempted. Here, there was obviously a significant state interest in protecting the company from trespass; the second, critical inquiry was whether the controversy presented to the state court was identical to or different from that which could have been presented to the Board. The Court concluded that the controversy was different. The Board would have been presented with determining the motivation of the picketing and the location of the picketing would have been irrelevant; the motivation was irrelevant to the state court and the situs of the picketing was the sole inquiry. Thus, there was deemed to be no realistic risk of state interference with Board jurisdiction.1177

Second, in determining whether the picketing was protected, the Board would have been concerned with the situs of the picketing, since under federal labor laws the employer has no absolute right to prohibit union activity on his property. Preemption of state court jurisdiction was denied, nonetheless, in this case on two joined bases. One, preemption is not required in those cases in which the party who could have presented the protection issue to the Board has not done so and the other party to the dispute has no acceptable means of doing so. In this case, the union could have filed with the Board when the company demanded removal of the pickets, but did not, and the company could not file with the Board at all. Two, even if the matter is not presented to the Board, preemption is called for if there is a risk of erroneous state court adjudication of the protection issue that is unacceptable, so that one must look to the strength of the argument that the activity is protected. While the state court had to make an initial determination that the trespass was not protected under federal law, the same determination the Board would have made, in the instance of trespassory conduct, the risk of erroneous determination is small, because experience shows that a trespass is far more likely to be unprotected than protected.1178

1176 San Diego Building Trades Council v. Garmon, 359 U.S. 236, 244 (1959).

1177 Sears, Roebuck & Co. v. Carpenters, 436 U.S. 180, 190–98 (1978).

1178 436 U.S. at 199–207.

Introduction of these two balancing tests into the Garmon rationale substantially complicates determining when state courts do not have jurisdiction, and will no doubt occasion much more litigation in state courts than has previously existed.

Another series of cases involves not a Court-created exception to the Garmon rule but the applicability and interpretation of § 301 of the Taft-Hartley Act,1179 which authorizes suits in federal, and state,1180 courts to enforce collective bargaining agreements. The Court has held that in enacting § 301, Congress authorized actions based on conduct arguably subject to the NLRA, so that the Garmon preemption doctrine does not preclude judicial enforcement of duties and obligations which would otherwise be within the exclusive jurisdiction of the NLRB so long as those duties and obligations are embodied in a collective-bargaining agreement, perhaps as interpreted in an arbitration proceeding.1181

Here, too, the permissible role of state tort actions has been in great dispute. Generally, a state tort action as an alternative to a § 301 arbitration or enforcement action is preempted if it is substantially dependent upon analysis of the terms of a collective-bargaining agreement.1182 Thus, a state damage action for the bad-faith handling of an insurance claim under a disability plan that was part of a collective-bargaining agreement was preempted because it involved interpretation of that agreement and because state enforcement would frustrate the policies of § 301 favoring uniform federal-law interpretation of collective-bargaining agreements and favoring arbitration as a predicate to adjudication.1183

1182See the analysis in Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399 (1988) (state tort action for retaliatory discharge for exercising rights under a state workers’ compensation law is not preempted by § 301, there being no required interpretation of a collective-bargaining agreement).

1183 Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (1985). See also Int’l Brotherhood of Electric Workers v. Hechler, 481 U.S. 851 (1987) (state-law claim that union breached duty to furnish employee a reasonably safe workplace preempted); United Steelworkers of America v. Rawson, 495 U.S. 362 (1990) (state-law claim that union was negligent in inspecting a mine, the duty to inspect being created by the collective-bargaining agreement preempted).

Finally, the Court has indicated that with regard to some situations, Congress has intended to leave the parties to a labor dispute free to engage in self-help, so that conduct not subject to federal law is nonetheless withdrawn from state control.1184 However,

the NLRA is concerned primarily with establishing an equitable process for determining terms and conditions of employment, and not with particular substantive terms of the bargain that is struck when the parties are negotiating from relatively equal positions, so States are free to impose minimum labor standards.1185